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POWER SECTOR EMISSION REDUCTIONS GET HARDER: The easy part is over for reductions in power sector emissions, and if trends continue, they could flatline, the conservative ClearPath Foundation warns in a new report out this morning.
If natural gas prices stay low, power-sector emissions will stop falling by 2026 and stall through 2050 – at just 4% lower than they are today.
The power sector will continue to emit over a gigaton of carbon emissions annually in 2050, the report finds, absent new policy changes.
Combined, the findings show the winning formula over the last 15 years of coal being replaced mostly by cheaper and cleaner natural gas along with renewables cannot be relied upon going forward.
“You will have to change your recipe if you want to be successful going forward,” ClearPath researcher Spencer Nelson, who authored the report, told me. “That will require a combination of private sector leadership and new policies.”
Natural gas prices are surging right now as demand has jumped after the pandemic and oil and gas producers are curbing new investments, but ClearPath is assuming prices will remain low over the long term.
Even if that happens, though, the remaining coal stock would be tougher for natural gas to replace because it’s newer.
“We are running out of coal to gas-switching opportunities,” Nelson said.
In addition, ClearPath forecasts a 34% increase in load growth — or power generation — between now and 2050.
“It’s hard to get to zero when we are also expanding the total size of the pie,” Nelson said.
Digging deeper: ClearPath commissioned the Rhodium Group, a research firm, to run two scenarios, including one taking into account existing policies, such as state standards requiring more clean energy and federal tax credits, and a second outcome that counts on utilities meeting voluntary targets to reach net-zero emissions by 2050.
Utilities representing 71% of customer accounts in the U.S. have established carbon-free or net-zero power goals by 2050.
If those pledges are hit, emissions are projected to continue their decline rather than flatline, ultimately reaching 56% below 2005 levels by 2050.
But that is still far from net-zero emissions, since parts of the country served by utilities that haven’t made carbon reduction commitments also have a lot of load growth that would likely be met mostly with natural gas.
What this means for Biden targets: Some major utilities have said they would back a Biden administration goal to cut emissions 80% by 2030, but Nelson said his new report shows that would be “very difficult” to achieve.
President Joe Biden also has promised to target 100% carbon-free power by 2035.
“If you accelerated decarbonization right now with the technology we have, it would cost a lot,” said Nelson, a former staffer for Sen. Lisa Murkowski when she chaired the Senate Energy Committee last year. Nelson helped write the Energy Innovation Act (the big clean energy innovation bill at the end of the year).
Reducing clean energy technology costs is key: To enable deeper emissions cuts, ClearPath is calling for policymakers to dramatically increase appropriations for research, development, and deployment of a suite of clean energy technologies, including advanced nuclear power, carbon capture and storage, electric transmission lines, and battery storage. The group is also supporting bipartisan legislation recently introduced, called the Energy Sector Innovation Credit, that would provide technology-neutral federal tax subsidies for first-of-a-kind clean energy technologies.
It also calls for maintaining the existing nuclear fleet, something utilities making net-zero commitments will have to do to meet their goals.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writer Josh Siegel (@SiegelScribe). Email [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
BREAKING…CONSERVATIVE CARBON TAX GROUP DROPS EXXON: The Climate Leadership Council and its advocacy arm American for Carbon Dividends have suspended U.S. oil giant ExxonMobil’s membership in both groups.
The move comes after one of Exxon’s senior lobbyists claimed in a bombshell sting video that the oil and gas giant’s support for a carbon tax is for show.
“After careful consideration of recent comments about ExxonMobil’s climate policy positions by one of its employees, we have decided to suspend the company’s membership in both the Council and AFCD,” an official at the Council told me.
Exxon was one of the first oil companies to endorse the Council’s carbon tax and dividend proposal in 2017. The following year, Exxon committed to providing $1 million over two years to the Council to help promote the plan.
The Climate Leadership Council was founded by former GOP secretaries of state James Baker and the late George Shultz.
Exxon CEO Darren Woods, in an earnings call last week, stressed the company would continue to “advocate” for a carbon tax.
In a statement today, Exxon called CLC’s decision “disappointing and counterproductive.”
“It will in no way deter our efforts to advance carbon pricing that we believe is a critical policy requirement to tackle climate change,” Exxon told me.
BILL CASSIDY’S PUSH FOR CLIMATE ‘RESILIENCY’ IN INFRASTRUCTURE BILL: Sen. Bill Cassidy, an oil and gas state Republican, quietly helped lead an effort to include record funding to protect against the effects of climate change in the bipartisan infrastructure bill, as I report in a new story this morning.
Cassidy worked Biden to ensure the legislation included federal money to protect against floods, reduce damage from wildfires, and even relocate communities away from vulnerable places.
He was one in a bipartisan group of 10 senators who negotiated the infrastructure agreement with the White House.
Kinda like a big deal: Cassidy’s success at convincing some of his GOP colleagues to back these climate resilience measures is no small feat. It shows congressional Republicans more readily accept the need to adapt to climate change than mitigate its cause — emissions caused by fossil fuels.
To make his case, Cassidy told me in an interview he presented a slideshow to the Senate Republican conference plastered with photographs showing properties and shorelines damaged by sea-level rise and erosion.
“One of the things I used to persuade people in my caucus about the benefit of the overall bill is I showed flooding in Upper Missouri. We showed the shoreline in North Carolina, which from 1848 until now has lost some 500 feet of shoreline,” Cassidy told me. “So, you formerly had a house which, in the far distance, over the dunes, you could see the ocean, and now, you have waves lapping up on the street in front of your house.”
Another photo captured how Port Fourchon in Louisiana had succumbed to erosion caused by sea-level rise.
“At one point, it was part of the mainland. There’s been so much erosion, it’s now like a peninsula,” Cassidy said.
“I showed those pictures and said what we are proposing would help address all those situations and more,” he added.
Emissions mitigation also addressed: Cassidy also insisted the bipartisan infrastructure bill makes progress on cutting emissions making the planet warmer, not just adapting to climate change already happening. But he warned Biden and Democrats against pursuing more aggressive policies that would harm fossil fuels as part of a subsequent larger legislative package sought without Republicans.
“The president told us he wouldn’t be taking two bites at the apple, so if (in reconciliation) they put in provisions regarding climate, that violates the spirit of what the president obligated to us,” Cassidy said.
Read the rest of the interview here.
RELATED…FEMA DISTRIBUTES RECORD RESILIENCE FUNDING: Speaking of resilience, the Biden administration announced yesterday it is distributing a record $3.5 billion in hazard mitigation grants to states to protect against climate change.
The Federal Emergency Management Association is making the funds available through coronavirus relief money already authorized by Congress.
Among other things, the funding is intended to help utilities or other critical facilities adapt to future climate conditions and reduce risks, through building microgrids, seismic and wind retrofits, flood protection projects, and more.
Deanne Criswell, head of FEMA, told the New York Times the goal of the new money is to get local and state officials to broaden their approach to put less emphasis on small projects that protect individual homes or buildings, and to instead fortify entire communities.
‘NO TURNING BACK’ FROM ELECTRIC VEHICLES: Biden sought to project unity with the auto industry yesterday afternoon as he signed an executive order at a White House event setting a target for half of all new vehicles sold in the United States to be electric or carbon-free by 2030.
CEOs of the Big Three U.S. automakers, along with the president of the United Auto Workers union, flanked Biden as he announced the new voluntary goal and unveiled stricter binding standards for fuel efficiency and tailpipe emissions for cars and light trucks.
In a joint statement, Ford, GM, and Stellantis said they share an aspiration to achieve sales of 40%-50% of EVs (defined as battery electric, fuel cell, and plug-in hybrids), but they are giving themselves more leeway.
“Their vision of the future is now beginning to happen, a future that is electric,” Biden said. “There is no turning back.”
To make his case, Biden warned about the lost opportunity cost of ceding the electric vehicle market to China.
The U.S. market share of electric vehicle sales is only one-third of China’s, which has dedicated generous subsidies to spur purchases while dominating the global supply chain for the cars and their batteries.
“The question is whether we will lead or fall behind,” Biden said.
MORE DETAILS ON FUEL ECONOMY PROPOSAL: The EPA released more details yesterday of its proposal with the Department of Transportation setting stricter standards for fuel-efficiency and auto emissions applied to vehicles beginning in the model year 2023 through 2026.
Biden’s standards require that automakers achieve fuel economy of 52 miles per gallon by 2026, slightly higher than Obama administration regulation targeting 51 miles per gallon by 2025.
The Trump administration’s weakened rules, by contrast, would have loosened the standard to about 44 miles per gallon by 2026.
U.S. gasoline consumption would drop by 74,000 barrels per day (0.9%) by 2025 and 340,000 b/d (4.2%) by 2030 under Biden’s fuel-economy proposal, per Chris Knight of Argus Media, who has a helpful thread on EPA’s regulatory impact analysis. The White House estimates the regulations would cut two billion tons of carbon dioxide and prevent the burning of about 200 billion gallons of gasoline.
Tougher rules coming for later this decade: Still, environmentalists criticized the rules as too weak by closely following the Obama standards. The Biden administration, however, said it plans to set tougher emissions regulations for vehicles produced beyond 2026 that could eventually help phase out gasoline-powered vehicles.
“The main thing we will be looking for is the administration to hold industry accountable for their promises with strong standards beyond 2026 that put us on a path to 100% electrification,” Dave Cooke, senior vehicles analyst at Union of Concerned Scientists, told me.
REPUBLICANS AREN’T HAPPY: While Democrats praised Biden’s EV target and fuel economy proposals, Republicans accused the president of selling out to liberals (which is an interesting case to make given auto industry support for the announcements).
Top House Energy and Commerce Committee Republican Cathy McMorris Rodgers of Washington said Biden’s stricter fuel economy standards “is another example of the Biden-Harris administration deciding to push the agenda of the radical Left.”
Rep. Garret Graves of Louisiana, top Republican on the House Climate Crisis Committee, said “these burdensome and unrealistic restrictions will drive up costs and export emissions.”
“We shouldn’t be forcing expensive California style regulations on American families,” Graves said.
Biden’s target, of course, is voluntary, unlike in California, which has mandated 100% EV and zero-emission new vehicle sales by 2035.
SPEAKING OF CALIFORNIA…LARGE HYDRO PLANT SHUT DOWN: The state took the Hyatt Power Plant offline yesterday for the first time ever after water levels at Lake Oroville, located next to the hydro plant, fell to slightly above 640 feet, the lowest in decades, due to a severe drought.
The plant can’t produce power when the lake levels fall below 630-640 feet, per the Washington Post.
Hydroelectricity generation typically varies based on precipitation levels, but California is being especially challenged by extreme heat and dry weather.
The California Independent System Operator, or CAISO, which oversees the state’s grid, has repeatedly asked customers to conserve energy as the heat drives up demand for power.
CAISO was forced to resort to rolling power outages in August 2020 amid a severe heat wave.
But California officials suggested the hydro plant shut down won’t lead to blackouts.
“The state has planned for its loss in both water and grid management,” said Karla Nemeth, director of the state’s water resources department, in a statement.
REMEMBERING RICHARD TRUMKA: Biden and other administration officials yesterday recognized the unexpected death of the president of the influential AFL-CIO, Richard Trumka.
Trumka, a former coal miner from southwestern Pennsylvania, became president of the United Mine Workers at just 33 years old before being elected president of the nation’s largest labor union.
In that role, Energy Secretary Jennifer Granholm said Trumka was “an invaluable partner and confidant as we’ve worked to create new opportunities for American workers in the clean energy economy.”
Trumka, who was close to Biden, criticized the president for canceling a permit for the Keystone XL oil pipeline on his first day in office.
The labor leader suggested Biden should have supplemented the Keystone decision with a plan for replacing the jobs.
But Trumka also helped persuade more skeptical labor leaders that Biden’s efforts to transition off fossil fuels wouldn’t harm their members, and he was a vocal supporter of the president’s Build Back Better clean energy infrastructure agenda.
The Rundown
Los Angeles Times How a federal agency is blocking America’s largest wind farm
Bloomberg Europe faces an energy shock after gas and power prices rocket
Calendar
WEDNESDAY | AUG. 11
12 p.m. CRES Forum will hold a virtual event titled, “Resiliency & Clean Energy: Keeping the Lights on While Reducing Emissions.”
